LITHUANIA: Brisk domestic demand fosters growth

Public and private investment have driven growth in the Lithuanian economy for another year. A further decline in unemployment has resulted in rapid wage increases. Furthermore, the enacted income tax reform will foster steady, strong growth in household consumption. The increase in external demand has been stronger than expected in 2018, but is likely to abate slightly in the coming two years. For 2018, we expect real GDP to grow by 3.5%, followed by 3% in 2019 and 2.6% in 2020.